Memphis rehabilitation center to pay $500K for providing 'worthless' services

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Spring Gate Rehabilitation and Healthcare Center in Memphis will pay $500,000 to federal authorities and Tennessee to resolve false claims allegations.

The Department of Health and Human Services' Office of Inspector General alleged that from 2012 to 2015, Memphis Operator LLC, doing business as Spring Gate, provided substandard and “worthless” nursing home services to residents, care deemed so deficient it can't be claimed through Medicare or the state's Tenncare program.

The allegations were first raised in a False Claims Act lawsuit brought by a whistleblower, according to a news release. The OIG intervened in the case and Spring Gate cooperated to reach a resolution.

According to court documents unsealed Monday, Spring Gate Rehabilitation and Healthcare Center used antipsychotic drugs to chemically restrain residents and “make them easier to manage.” Billing the government for such medications without medically accepted indications is forbidden by federal law.

Bill Jordan, an outside attorney for Spring Gate, said there was no admission of liability as part of the settlement.

“Spring Gate is pleased to have put this matter behind it and remains fully committed to the health and safety of its residents,” Jordan said in a statement to McKnight's. “Spring Gate is proud of the high quality care its dedicated employees provide to their patients.”

Jordan noted Spring Gate is one of 25 Tennessee nursing homes recognized by the American Health Care Association and National Center for Assisted Living as part of the Quality Initiative Recognition Program.

In addition to the $500,000 settlement, Spring Gate entered into a corporate integrity agreement intended to deter future wrongful conduct.